HealthSouth puts religious groups in sights for Scrushy money

View full sizeJ. Scott Moore. Photo from 2007.The hunt for Richard Scrushy's money has intensified, with document requests sent to religious organizations to which his foundation donated millions of dollars while he faced criminal fraud charges.

HealthSouth Corp. shareholder lawyers last week received court approval to view financial records from religious groups affiliated with Bessemer pastor J. Scott Moore. Moore's Bessemer-based Trinity Life Church and other Moore-led ministries collected $1.7 million in donations from Scrushy's charitable foundation between 2004 and 2007, according to the charity's financial records.

Moore and many other Birmingham-area religious leaders were staunch Scrushy allies during his 2005 federal criminal trial in Birmingham, where he was charged with leading a massive accounting fraud while serving as chief executive at HealthSouth. Moore was a regular courtroom observer, appeared on the religious television show Scrushy founded and exalted with the former corporate titan when a jury found him not guilty of artificially inflating HealthSouth profits.

Scrushy, whose net worth was pegged at almost $300 million by federal prosecutors, didn't prevail at his next trial in Birmingham. He owes Birmingham-based HealthSouth about $2.8 billion after being found liable at a 2009 civil proceeding in Jefferson County Circuit Court for the fraud that almost ruined the company.

While few expect Scrushy to pay the whole civil judgment, he hasn't voluntarily paid anything while jailed in Texas on unrelated bribery charges. That has left HealthSouth shareholder lawyers to search for his cash, investment accounts and real property. Subpoenas, court orders to produce documents or other material of use in a legal proceeding, are part of the arsenal.

"The purpose of the subpoenas is to determine what happened to Richard Scrushy's assets so we can track them down," said shareholder lawyer John Somerville. "We are very careful about dealing with churches and charities, but at the same time, we have to contact everyone who might have collaborated with Mr. Scrushy."

Moore in 2007 opened a new Trinity Life Church in Bessemer, a 2,500-seat worship center that cost $5 million. It has since been abandoned by Moore, and the Scrushy money is gone, said Eddie Sexton, his lawyer.

"Dr. Moore is not holding any money for Richard for when he gets out jail," Sexton said. "There is nothing there."

Sexton said the mega-church was plagued by cost overruns and construction delays that sapped bank accounts. Investments made with the Scrushy foundation's donations went bad, he said. Moore is now operating from a modest leased building in Bessemer, Sexton said.

"He wants to get back to basics, a small church," Sexton said.

Also set to receive a Jefferson County Circuit Court subpoena is Kingdom Builders, according to court records. That is a "worldwide, interdenominational ministry and resource center" founded by Scrushy, according its Web site.

Attempts to reach lawyers for Scrushy were unsuccessful Monday. Their client, 57, is in federal prison in Texas after being convicted in Montgomery federal court in 2006 of bribing former Gov. Don Siegelman for a slot on the state hospital board. He is set to be released in June 2013.

Scrushy courted a wide range of church supporters while awaiting the 2005 trial for the accounting fraud that almost pushed HealthSouth into bankruptcy, after investors and creditors learned the company was reporting hundreds of millions of dollars in phony profits while incurring actual losses in the billions.

Between 2003 and 2005, the Scrushy charitable foundation gave $1.5 million to Guiding Light Church, one of the area's largest predominantly black worship centers. Scrushy's foundation gave $50,000 to a ministry affiliated with Birmingham's Bethel Baptist Church in 2006. World Outreach Ministries of Jacksonville, Fla., received $110,000. A group called Christ Abundant Life Church received $36,000.

HealthSouth will get a 40 percent share of whatever proceeds are collected from Scrushy's estate, as compensation for the accounting fraud. The shareholder lawyers will get 35 percent, and a class of HealthSouth stockholders will get 25 percent.